British foodmakers' confidence sags as weak pound erodes margins

EDINBURGH Oct 12 More than two-thirds of
British food makers have become less confident about the
business environment since Britain's vote to leave the European
Union, a survey published on Wednesday said.

Three-quarters of British food manufacturers have seen an
increase in the price of imported ingredients due to the fall in
the value of the pound since the vote, and 63 percent reported a
decrease in profit margin, according to the poll by Britain's
Food and Drink Federation (FDF) between Sept. 16 and Oct. 7.

The survey followed a raft of data showing that British
consumers have so far been largely unaffected by the June
referendum, which heralded an end to more than 40 years of
stable trade relations within the EU.

Among businesses, however, there are clear signs of doubt
which may signal weaker economic growth down the line.

Earlier this week a British Chambers of Commerce survey
showed business investment and turnover confidence hit four-year
lows.

Of 82 companies of all sizes surveyed by the FDF, or around
one third of its total membership, 81 percent said they expected
the price of ingredients to continue to rise in the coming year,
but only 32 percent of them expected UK sales to increase.

Food and drink, Britain's largest manufacturing sector,
provides 400,000 jobs directly, of which almost a third are
filled by non-British EU nationals. Of those companies with EU
staff, 71 percent said employees had expressed concerns about
the referendum will mean for them and 8.7 percent reported that
some staff had stated they would leave Britain.

Prime Minister Theresa May has given little away on her
Brexit negotiating strategy, signalling that she wants to return
sovereignty to Britain, reduce immigration but also have the
best possible deal with the EU for businesses and trade.

"The assurances we heard from government last week must be
underpinned by credible plans for restoring confidence and
negotiating a workable future relationship with the EU," Ian
Wright, Director General of the Food and Drink Federation, said
in a statement accompany the survey findings.
(Reporting by Elisabeth O'Leary; editing by Mark Heinrich)

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